COVID-19 and Housing Prices: Australian Evidence with Daily Hedonic Returns

Using daily hedonic housing price index for five Australian capital cities, we document a negative relationship between prior COVID-19 cases and daily housing returns. Specifically, the daily housing return drops by 0.35 basis points or 1.26 percentage points annually for every doubling of newly confirmed COVID-19 cases in a state. We also examine the effect of government lockdown orders on housing returns and find insignificant results. These findings are robust to using total active COVID-19 cases and other model specifications. Overall, our paper contributes to the literature on the geographic spread of pandemics and real estate prices.